Are we in an Art Market Bubble?

[jamesreeve5]

richardface said:

tried to read it, but it just made my eyes hurt.

My theory of the art market is like a sausage on a BBQ.

When the sausage is fresh - all eyes on sausage.

When the sausage is ready - everybody wants the sausage.

If sausage falls on floor but not yet cooked - no body wants the sausage.

If sausage falls on floor but is cooked well - there will still be a limited demand for the sausage in question.

If sausage is burnt - it hangs around for a while but will eventually end up somewhere.

If sausage is cooked with bacon wrapped round it - i.e 2 artist collaboration, very popular.

You mentioned sausage on there way too much.

thanks for the report James, I found it interesting, I have been noticing less buying at art fairs since (and including) Frieze 2007. It doesn't seem too bad right now, in fact a small dip could be a little healthy and help lower all of that speculative buying... lets hope the trend doesn't continue though.

[qwertystar]

Thanks James - no matter what people say nobody wants their collection to be worth less now then then when they bought it. Now buying for profit is a different kettle of fish however...

[James Smith 77]

Just some food for thought. I have recently been trying to think long and hard on which direction the overall market is going to go. Expect the best...plan for the worst type of thing. I consider myself a true art addict (Like all of you) and I think like most addicts refuse to hear/see any signs pointing to something bad on the horizon that may ruin my high.

I was an equities trader on Wall St. in 1999 and saw the rise and CRASH of the U.S. stock market. New Blue Chip stocks created and no revenue earning companies where worth billions. For a long time leading up to the crash there were magazine articles warning people of the signs. The experts all said to invest in the blue chips of the time and your money would be safe (Enron, MCI Worldcom, EMC, AOL, etc.) Even when the market started to tank most people didn't listen and rode the fall all the way to the bottom. ALL THE PIGS GOT SLAUGHTERED.

Seems earily similar to todays art market (Urban Art included). This isn't the first time that Urban Art has made an appearance on the mainstream art scene. In the late 80's the NYC graffiti scene was gaining quite momentum and the works of (Futura, Lee, Pink, Crash, Basquiat, Haring, Daze, Ramelzee, Fab5, etc.) were being shown in major museums around the world with works selling for serious money. Then it crashed. I am freinds with some of these artists and they are still bitter over what happened.

I would love to see Banksy, Neate, Micallef, Walker, DFace join the ranks of Warhol and Basquiat. And I try to convince myself that it is possible and happening. But I just don't know. This market like all markets are ultimately controlled by a few who make up all of the rules. Which way will these powers pull our market?

I know that if there is a crash/major correction 9/10 artists putting out works/prints will virtually disappear. Over the last 6 months I have attempted to thin my collection to only pieces I love and believe will stand the test of time(Rare Banksy's, Barry Mcgee installation, Originals). I have been much more conservative when making purchases (trying not to join in on the week's hype, waiting for the right time to pounce). But then at moments like now I ask myself whether I should just cash in my chips. Buy gold bullion (if the markets tank gold will soar), wait for a potential crash and then jump back in and buy low. Buy low sell high. Recently, I have been noticing galleries not adding as much new inventory as previously. Appearing to be selling as much as they can for the highest prices they can.

But F it. I know I'll just keep on doing what I've done for years because I love it. Hopefully we will all be Millionaires 20 years down the line.

[jamesreeve5]

James Smith,

you are completely right on this... I have been trying to thin out my collection a bit as well we can't expect to go on like this forever... there is a tipping point.

[BONGO]

BONGO WISHES TO REMIND EVERYONE THAT SALES OF ROLLS ROYCES DO INDEED FALL DURING A RECESSION

SALES OF MERCEDES DO NOT FALL BY THE SAME LEVEL IN THE SAME PERIOD

[jones27]

honestly who gives a flying feck. The days of popping into roughtrade and buying the only banksy publication or stumbling upon a laugh now on ladbroke grove (like 1 year after it went up) seem a million miles away....All the talk these days is about art markets and greed.

[chevyav53]

I started to wonder this after a few of the latest releases, especially Invader.   Still amazes me someone paid $11K for that print.  But started to wonder if art, just as I feel with the current economic situation, are we in another bubble.  Started to read up and just as with economic news some feel yes some feel no.  Thoughts? 

Most articles reference this chart

[darwin]

In general - not just in street art - I think we've been seeing a bubble for quite some time.

Here's the problem as I see it... Interest rates are 0%, for all practical intents and purposes... You can't make money out of money any more. So what you've got is a massive wall of money chasing the next "opportunity", looking for a place where its value will be nurtured and not wither away.

[mose]

Aug 28, 2017 14:44:35 GMT 1 chevyav53 said:

There is no doubt we are in a bubble.  That's pretty clear.  How much inflation is left in that bubble is the only main issue.

The 1990-1994 slump on the art market is a good historical precedent.  The 1990 sale of Van Gogh's "Portrait of Dr. Gachet" for $82.5million was the top of that era's market and all downhill from there.  

Here's what Paula Cooper and Mary Boone, two legendary gallerists, said at the time:

__________________________________
Ms. Cooper said she considers the market healthier not because prices are necessarily stronger, but because many of the more established collectors have returned after being put off by the go-go atmosphere of the 80's. "The pace became too fast and seemed to be more about money than art. They were quite repelled by the whole thing," she said.



Ms. Boone said she believes the questioning now under way in the art world reflects a larger change. "Value in everything is being questioned," she said. "The psychology in the 80's was excess; in the 90's, it's about conservation; it's about determining the value of everything."
__________________________________

Sounds tremendously familiar, right?

The one thing that concerns me about the potential post-burst recovery is the consistent indication that millenials are generally just not art buyers(or object buyers in general, much more experience-oriented).  A market requires buyers.  The baby boomers proved themselves to be excellent buyers.  Generation X doesn't matter, least influential generation ever(of course, I'm a part of this).  Millenials' behavior, their purchasing decisions, is a huge concern for many markets.  For example, the antique furniture market is, and has been, shook by millenials lack of interest. 

[highflyer]

Aug 28, 2017 14:44:35 GMT 1 chevyav53 said:

I started to wonder this after a few of the latest releases, especially Invader.   Still amazes me someone paid $11K for that print.  But started to wonder if art, just as I feel with the current economic situation, are we in another bubble.  Started to read up and just as with economic news some feel yes some feel no.  Thoughts? 

Most articles reference this chart

You like to keep repeating about the 11k sale don't you? Interesting.

It's best offer on Ebay and 12k and a guy goes in straight at 11k without dropping in a say...8k bid? Come on, we weren't born yesterday.

Then you state, "But started to wonder if art, just as I feel with the current economic situation, are we in another bubble."

Then a few minutes later you state that art (yes art as a whole), is "no doubt" in a bubble.

So which is it? Did you decide in those few mins of pondering?

Also, economic bubble? Give me a break. Who's we?

[highflyer]

Aug 28, 2017 15:28:27 GMT 1 mose said:

Aug 28, 2017 14:44:35 GMT 1 chevyav53 said:

There is no doubt we are in a bubble.  That's pretty clear.  How much inflation is left in that bubble is the only main issue.

The 1990-1994 slump on the art market is a good historical precedent.  The 1990 sale of Van Gogh's "Portrait of Dr. Gachet" for $82.5million was the top of that era's market and all downhill from there.  

Here's what Paula Cooper and Mary Boone, two legendary gallerists, said at the time:

__________________________________
Ms. Cooper said she considers the market healthier not because prices are necessarily stronger, but because many of the more established collectors have returned after being put off by the go-go atmosphere of the 80's. "The pace became too fast and seemed to be more about money than art. They were quite repelled by the whole thing," she said.



Ms. Boone said she believes the questioning now under way in the art world reflects a larger change. "Value in everything is being questioned," she said. "The psychology in the 80's was excess; in the 90's, it's about conservation; it's about determining the value of everything."
__________________________________

Sounds tremendously familiar, right?

The one thing that concerns me about the potential post-burst recovery is the consistent indication that millenials are generally just not art buyers(or object buyers in general, much more experience-oriented).  A market requires buyers.  The baby boomers proved themselves to be excellent buyers.  Generation X doesn't matter, least influential generation ever(of course, I'm a part of this).  Millenials' behavior, their purchasing decisions, is a huge concern for many markets.  For example, the antique furniture market is, and has been, shook by millenials lack of interest. 

"Legendary galleries"...that had literally nothing to do with any bubble...

[chevyav53]

Aug 28, 2017 15:46:20 GMT 1 highflyer said:

Aug 28, 2017 14:44:35 GMT 1 chevyav53 said:

You like to keep repeating about the 11k sale don't you? Interesting.

It's best offer on Ebay and 12k and a guy goes in straight at 11k without dropping in a say...8k bid? Come on, we weren't born yesterday.

Then you state, "But started to wonder if art, just as I feel with the current economic situation, are we in another bubble."

Then a few minutes later you state that art (yes art as a whole), is "no doubt" in a bubble.

So which is it? Did you decide in those few mins of pondering?

Also, economic bubble? Give me a break. Who's we?

What is your question?  I know you are probably high as the name implies but please try to gather your thoughts into a coherent question and I would love to answer it. 

[Art Fan 2011]

The Street art / urban art has grown massively in recent years as more and more people have become aware of it. With more people seeking out those rare works by favoured artists it has forced prices northwards. The economy as a whole seems fairly good for now, people have plenty of cash, equity in houses and un-employment is near record low`s. When things change (which they always do) people will think alot more about throwing 10`s of thousands on a piece of paper so we may well see a cooling of prices, but for now I think things will continue to head upwards - until the banks/governments mess it all up again!

[highflyer]

Aug 28, 2017 15:52:25 GMT 1 chevyav53 said:

Aug 28, 2017 15:46:20 GMT 1 highflyer said:

You like to keep repeating about the 11k sale don't you? Interesting.

It's best offer on Ebay and 12k and a guy goes in straight at 11k without dropping in a say...8k bid? Come on, we weren't born yesterday.

Then you state, "But started to wonder if art, just as I feel with the current economic situation, are we in another bubble."

Then a few minutes later you state that art (yes art as a whole), is "no doubt" in a bubble.

So which is it? Did you decide in those few mins of pondering?

Also, economic bubble? Give me a break. Who's we?

What is your question?  I know you are probably high as the name implies but please try to gather your thoughts into a coherent question and I would love to answer it. 

There are 5 questions. You can pick them out by looking for each ?

[chevyav53]

That is my concern. At least in the states the last bubble burst in large part due to housing and the equity being used and debt being accumulated. We are now at record highs for auto loans and now defaults are increasing. Rates have remained artificially low endangering the dollar. There are other concerns as well and hence the topic being raised again.

All this leading to a question, do I wait another year to see if that piece I want drops in price significantly or get in now even if that means stretching the budget? I am not looking at any specific piece so don't try to sell me anything.

[avec art]

I guess that in times of uncertainty people like to invest in something tangible such as gold or art. So this asset class does not necessarily follow the same trends as the rest of a given economy.

[oxfordwelshchap]

Aug 28, 2017 16:20:27 GMT 1 avec art said:

I guess that in times of uncertainty people like to invest in something tangible such as gold or art. So this asset class does not necessarily follow the same trends as the rest of a given economy.

Ah now I think that is true to a large extent, for the top 1% in society. Most people wouldn't dream of turning to art when their wages stagnate or they lose their job. Investment as a whole seems to be for those with x amount of cash to waste.

[oxfordwelshchap]

Aug 28, 2017 16:04:40 GMT 1 chevyav53 said:

That is my concern. At least in the states the last bubble burst in large part due to housing and the equity being used and debt being accumulated. We are now at record highs for auto loans and now defaults are increasing. Rates have remained artificially low endangering the dollar. There are other concerns as well and hence the topic being raised again.

All this leading to a question, do I wait another year to see if that piece I want drops in price significantly or get in now even if that means stretching the budget? I am not looking at any specific piece so don't try to sell me anything.

I think if you have the cash and want it then go for it. I waited years before buying a house trying to anticipate the market - and it just kept climbing and climbing!

[Vanessa Villegas Art Advisory]

Aug 28, 2017 15:28:27 GMT 1 mose said:

First, I think you have to separate "Art as an Asset Class" from Contemporary Art to accurately discuss the possibility of a bubble. "Art as an Asset Class" really only includes established artists with market lineage. So a Modigliani or a Warhol fits into this category - but I would not yet include some of the Contemporary artists discussed in this group. Artists that have been established by museums, auctions, and culture never go away - their prices may dip but the trajectory is generally upward bound. Thats why high-end collectors are willing to overpay for a premium artworks by these artists, knowing in a few years they can probably flip them for $100k+. Thats a nice return if you are at that level.

The Contemporary market is much more volatile and Street Art in general seems more like a bubble. The street art movement is certainly one of the major art movements of our time. That said it's popularity has brought so many "copy-cat-like" artists. Eventually most of these artists will fade away and the Street Art movement will be defined by a handful of artists. Who these artists are will depend on the same factors: museums, auctions, and culture. There is a saying that a film becomes iconic when it is referenced over and over again by other cultural outlets: music, movies, etc. Who are the current artists who are being referenced over and over again in different segments of popular culture? These will be the artists to bet on. 

Regarding millennials: yes there is a decided disinterest in "ownership" or "collectorship" amongst millennials. I think this has more to do with access to capital. Millennials are choosing to not need "things" because they watched the world crumble and loose it all during the Great Recession. The idea that you don't need "stuff" or that we can "share" stuff is more about not wanting to be vulnerable to the markets. The generation as a whole was put into precarious position, and their ability to develop their careers and wealth has been stifled. When millennials come into their money they will invest in art, and who they invest in will depend largely on who they are experiencing in art now. 
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[darwin]

chevyav53 I see you're running the same thread over on eBeans.

Tough crowd, huh?

[Winter]

I think we're in a forum bubble, there are artists who are big on here who are pratically unheard of in the outside world.

[highflyer]

Aug 28, 2017 21:16:27 GMT 1 darwin said:

chevyav53 I see you're running the same thread over on eBeans.

Tough crowd, huh?

Can't be bothered to look but did he mention the 11k "sale" by any chance? He/she must as shocked as the rest of us that the other one on ebay hasn't flown off the shelf for that price!

[chevyav53]

Expect that from all forums, why I've stayed away so long, just get tired of trolls. Been online since AOL dial up days but some little p*ick been on a forum for 7 years thinks they know it all. You see the other forum posted the same topic and was amused by the anger.

It is refreshing to see intelligent people still in forums and appreciate responses from people such as you, Vanessa, artfan , art cave etc.... really liked Vanessa's input. I'd agree, only point I wonder, only for the sake of thought, is will art such as Picasso Warhol, Elizabeth Peyton etc... will that hold the test of time. As mose put so well, look at the antique furniture market, I am a GenXer and still not into antique furniture. Have the expendable income for it just never into it, no one I know is.

So what will happen, no one can know but I find it an interesting discussion.

[highflyer]

Aug 28, 2017 21:57:28 GMT 1 Winter said:

I think we're in a forum bubble, there are artists who are big on here who are pratically unheard of in the outside world.

Hence why people try to sell Banksy's on here at above market prices.

[Deleted]

Aug 28, 2017 21:57:28 GMT 1 Winter said:

I think we're in a forum bubble, there are artists who are big on here who are pratically unheard of in the outside world.

Just out of interest can I ask who you are referring to please

[chads007]

Aug 28, 2017 22:51:29 GMT 1 @cjp said:

Aug 28, 2017 21:57:28 GMT 1 Winter said:

I think we're in a forum bubble, there are artists who are big on here who are pratically unheard of in the outside world.

Just out of interest can I ask who you are referring to please

Scroll down the first few pages of the main section and the for sale section - most people in the outside world won't have heard of most these street/urban artists...it's the epitome of microcosm

[Deleted]

I had to look up two words there, thank you for increasing my vocabulary

I think most people in the outside world have very little knowledge of any artist's not just in the Urban Art Scene but across the board, you ask the average Joe to name as many famous artist's as they can and I bet most could not name more than Five.(if your lucky) The fact is most people do not have an interest or are just not aware about art and will not own anything other than furnishing prints from Ikea.

The art market has always been an elitist group much like the Antiques trade but with the development of technology this has changed much to the frustration of the Gallery and Auction Houses as well as the old Antiques Dealers. I am involved in both and have seen this first hand.

I think Urban Art has played a massive part in dispelling this on the art side of things, everyone knows who Banksy is yet most could not name another Urban Artist this is because they only know what they are told in the media.

I could go on and on and write a huge post on this as it is something I am very passionate about but the fact of it is that I am much better at expressing my opinions with my voice rather than in writing so I shall leave it there before I start waffling.

If your ever up North and want a good chin wag and a good (best) cup of tea please pop by.

[tran16]

A bubble implies a bull market doesn't it ? .. values rising consistently ? Then how come we see so much work (some of real quality) on here selling at or below cost. I would say it's predominantly a bear market in favour of buyers, apart from the obvious exceptions

[Vanessa Villegas Art Advisory]

Aug 28, 2017 23:54:34 GMT 1 @cjp said:

I had to look up two words there, thank you for increasing my vocabulary

I think most people in the outside world have very little knowledge of any artist's not just in the Urban Art Scene but across the board, you ask the average Joe to name as many famous artist's as they can and I bet most could not name more than Five.(if your lucky) The fact is most people do not have an interest or are just not aware about art and will not own anything other than furnishing prints from Ikea.

The art market has always been an elitist group much like the Antiques trade but with the development of technology this has changed much to the frustration of the Gallery and Auction Houses as well as the old Antiques Dealers. I am involved in both and have seen this first hand.

I think Urban Art has played a massive part in dispelling this on the art side of things, everyone knows who Banksy is yet most could not name another Urban Artist this is because they only know what they are told in the media.

I could go on and on and write a huge post on this as it is something I am very passionate about but the fact of it is that I am much better at expressing my opinions with my voice rather than in writing so I shall leave it there before I start waffling.

If your ever up North and want a good chin wag and a good (best) cup of tea please pop by.

This is exactly correct. Most people are not cultured nor do they have any understanding of the important nuances in the progression of art and human expression. So when there is a contemporary artist that even the average joe takes note of, I think that is significant. I ran a contemporary gallery for many years before going private, and this forum would be shocked and probably dismayed by the artists that got the most play. 

Why do you think the Warhol and Lichtenstein markets exploded in the last 10 years? Its because the Baby Boomers & early GenXers came into their wealth. The pop artists were more known to the masses because pop art was interwoven with the culture. Warhol was the master of exploiting the flash of media, particularly by using celebrities as his subjects. So I venture we cannot disregard the media and its importance in selecting the next generation of investment grade artists. Now more than ever that our society has become completely media engaged 24/7. 

PS - Thanks to Chevyav53 for the shout out and the interesting forum topic! 


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[mose]

Aug 29, 2017 19:37:23 GMT 1 Vanessa Villegas Art Advisory said:

Aug 28, 2017 23:54:34 GMT 1 @cjp said:

Why do you think the Warhol and Lichtenstein markets exploded in the last 10 years? Its because the Baby Boomers & early GenXers came into their wealth. The pop artists were more known to the masses because pop art was interwoven with the culture. Warhol was the master of exploiting the flash of media, particularly by using celebrities as his subjects. So I venture we cannot disregard the media and its importance in selecting the next generation of investment grade artists. Now more than ever that our society has become completely media engaged 24/7. 
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On the Warhol market, let's not forget the machinations of the Mugrabi Family, Gagosian, and the foundation.  They have to receive credit for their part in the ramp up of prices.  Much of this was orchestrated and very well organized.